Summers Says Wrong to Say Markets Tell Fed It Should Cut

Former Treasury Secretary Lawrence Summers said that bond-market pricing doesn’t amount to a judgment call on what the Federal Reserve ought to do with interest rates, and that it would be a “very serious error” for policymakers to ease next week.

“It would have been a grave mistake to have eased already, and would be a very serious error to ease at this upcoming meeting,” Summers said on Bloomberg Television’s Wall Street Week with David Westin. A cut on May 7 would undermine confidence in the Fed’s determination to bring down inflation, causing longer-term borrowing costs to climb, he said.